Iraq has halted crude oil exports to South Korea, in protest of an exploration deal between Korean firms and the Kurdish regional government.

The annual contract between Iraq and South Korea's top refiner, SK Energy, was due for renewal January 1. SK Energy says it has been told to back out of the Kurdistan deal if it wants exports to resume.

A consortium of South Korean firms led by the state-run Korea National Oil Corporation signed a deal with the Kurdish government to explore the Bazian oil field in the Dahuk region of northern Iraq. The corporation says it will not change its plans.

South Korean energy officials say Iraqi crude accounts for less than four percent of total imports. Officials say purchases will be made in the spot market to cover the shortage.